Airbus Inks China Deals as Governments Break Ice on ETS

 - March 26, 2014, 2:55 PM
Under the terms of a new contract signed Wednesday, the A320 final assembly line in Tianjin will continue to run until at least 2025. (Photo: Airbus)

An extension of the contract to maintain the A320 final assembly line in Tianjin, China, by another 10 years led a series of agreements Airbus entered with Chinese partners on Wednesday that also marked the end of a bitter trade dispute over Europe’s Emissions Trading Scheme (ETS). The contracts, signed in Paris by Airbus president and CEO Fabrice Bregier and various Chinese parties and witnessed by French President François Hollande and visiting Chinese President Xi Jinping, accompanied a so-called general terms agreement covering the purchase of 70 Airbus airplanes by China Aviation Supplies Holding Company (CAS). The deal would include 27 A330 long-range widebodies, an order for which Beijing had blocked in retaliation for the EU’s now suspended plan to impose ETS on airlines from outside Europe. The contract would also cover 43 A320-family narrowbodies.

The contracts also include cooperation in air traffic management to enhance Chinese airspace capacity and several initiatives to promote China’s aviation industry, most notably in the field of widebody fleet development.

Phase II of the A320 assembly joint venture between Airbus and partners Tianjin Free Trade Zone and Aviation Industry Corporation of China (AVIC) covers the period between 2016 and 2025. It also expands deliveries to the entire Asian region and includes final assembly of the A320neo family from 2017 onwards.

Meanwhile, Airbus and the Chinese parties will jointly invite more major component suppliers to develop industrial projects in Tianjin to support the development of the final assembly line and the formation of a competitive supply chain.

The ATM cooperation calls for Airbus to support the Civil Aviation Administration of China (CAAC) with development of new technologies in the field and drive research into regional sustainable jet fuel and other projects to reduce China’s environmental footprint.

Finally, Airbus and relevant Chinese parties have agreed to work toward demonstrating an interest in establishing a widebody aircraft completion center in China, including cooperation on widebody cabin interiors with AVIC.

“We are going to celebrate 30 years of successful cooperation with our Chinese partners next year, and I am proud that today we are strengthening the foundation for extending our successful cooperation into the future,” said Bregier. “Our partnership with China [and] the mutual benefits we’ve explored have been instrumental in furthering our global strategy, and we are honored to have China as an essential pillar in our global setup. We are looking forward to providing top performing aircraft from our Chinese assembly lines for many years to come.”